Taking Scotland Forward: Economy

Part of the debate – in the Scottish Parliament on 31st May 2016.

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Photo of Joan McAlpine Joan McAlpine Scottish National Party

I, too, welcome the Cabinet Secretary for Economy, Jobs and Fair Work to his new role. I always found him to be receptive and approachable in his previous role at infrastructure and transport and I look forward to continuing that relationship.

A number of members have outlined some of the challenges that face their areas of rural Scotland and South Scotland in particular. I will talk about a solution to some of those challenges. It is rather a dry solution and, if members will bear with me, it merits some explanation.

The nomenclature of territorial units for statistics—NUTS—involves the setting and regulation of geographical boundaries by the European Union, the core purpose of which is the reporting of regional statistics to Eurostat. Those statistics inform regional policy development and, crucially, determine regional funding allocations, including of significant funding streams such as European rural development funding and European structural funding.

Until now, the South Scotland region that I represent has not been accurately reflected in the statistical areas, as the Borders are thrown in with urban areas in the east and Dumfries and Galloway is in with urban areas in the west. I was pleased when, earlier this year, the Scottish Government approved a proposal, supported by the south of Scotland alliance, to create a fifth NUTS region to cover the rural south. I understand that it is now with the Office for National Statistics for approval by Eurostat.

That might all sound dry, but it has serious implications for the lives of thousands of people who live in South Scotland. To quote the south of Scotland alliance, which comprises Dumfries and Galloway Council and Scottish Borders Council as well as other key stakeholders:

“The current areas are so large and diverse that they mask low levels of GDP and a lack of relative prosperity” in the south.

The proposed new South Scotland NUTS level 2 area includes North, South and East Ayrshire and South Lanarkshire, as well as Dumfries and Galloway and the Scottish Borders. Councillor Colin Smyth—now elevated to MSP—has outlined some of the issues that face Dumfries and Galloway in particular. However, across South Scotland, low levels of economic production are endemic.

In 2013, South Scotland’s GVA per head was 70 per cent lower than the EU average. Wage levels in the area are below the Scottish average. There is a lack of high-growth sectors such as information and communication and finance and insurance. Southern Scotland has a relatively low population of people aged between 18 and 40 in comparison with the Scottish average, and its settlement pattern is based on towns, villages and large rural hinterlands. In 2012, the Scottish Agricultural College undertook research into the distribution of population and the vulnerability of towns across Scotland. Twenty-two of the towns that were judged to be vulnerable were in southern Scotland, and 19 of those are among the 45 most vulnerable towns in Scotland.

How can a new statistical designation help to deal with that kind of endemic problem? The new statistical designation of southern Scotland shows that GDP in the area is just over £17,000, which compares with a UK average of more than £36,000. Indeed, GDP in the Highland region is more than £19,000, and we all know the challenges that that region has faced—they were eloquently outlined by Kate Forbes in her maiden speech earlier.

If the new statistical designation can unleash a better distribution of European structural funds, the south of Scotland can only benefit from that. Those funds are worth more than €985 million. They can help SMEs and can help with digital connectivity, which is a subject that several members have raised. Further, the social funds can combat the poverty that is, sadly, endemic in certain areas of the south and is often hidden, in the way that rural poverty can be.

However, I am concerned that the solution that I propose, on which many people have worked hard for a long time, is under threat. We have an opportunity that is immediately met by a threat—the threat of Brexit. The new MSP for Dumfriesshire, who campaigned successfully to win the constituency for the Conservatives, revealed only after the event that he wanted to pull his constituents out of Europe. That proposal threatens the benefits that we could derive from the new statistical designation. It threatens things such as connectivity, our opportunity to draw down from the social fund—